FCC completes forward auction with bids of USD 19.6 bln

Monday 13 February 2017 | 09:15 CET | News

The FCC announced completion of its forward auction of broadcast airwaves for mobile services. The final bids for 70 MHz of licensed spectrum totaled USD 19.6 billion, much less than originally expected. This could still rise slightly in the final round where operators can bid for specific blocks of frequencies.

Over USD 10 billion of the proceeds from the auction will go to broadcasters that agreed to give up spectrum in the 600 MHz band, as well as USD 1.75 billion to help broadcasters transition out of the frequencies. The remainder goes to the US government.

The transition of the spectrum to mobile services is expected to take up to 39 months, according to the schedule adopted by the FCC. A total 62 companies, including all the major mobile operators, applied to participate in the auction. The exact winners will be announced after the final assignment award.

While the completion of the auction was welcomed by industry groups and FCC chairman Ajit Pai as support for expanded broadband services, the FCC commissioner Michael O'Rielly called for a review of the incentive auction process. O'Rielly said that Congress provided a strong basis for using market forces to make more spectrum available for mobile services, but the "previous majority’s implementation appears to have been based on some assumptions that were far off the mark". The FCC had originally hoped to raise around USD 86 billion from the auction of 126 MHz, but this was later revised down after bidders valued the spectrum at much less than broadcasters.

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